Cannabis Accessory Compliance Checklist: Guide for Retailers

Cannabis Accessory Compliance Checklist: Guide for Retailers

By Ariel Glinter

The Cannabis Act on October 17, 2018, cannabis accessories are now a bona fide consumer good that may legally be sold in Canada for use with cannabis. This has created an entirely new opportunity for retailers.

On October 17, 2018, Canada became the first G7 country in the world to legalize cannabis for non-medical use. While the majority of the attention thus far has been concentrated on the details of the plant itself, cannabis presents only the base of an entirely new economic vertical that includes practically every aspect of the business world as service providers, part suppliers, and others jockey for space in one of the fastest growing industries on the planet.

One aspect of the burgeoning cannabis economy that has continued to exist under the radar so to speak, is the business of cannabis accessories. Prior to legalization, cannabis accessories were mainly sold in specialty stores, and almost always “for tobacco use only.” The market for accessories has consequently been very highly fragmented with very little information available to differentiate between different products and companies.

That all changed last October. With the passage of the Cannabis Act on October 17, 2018, cannabis accessories are now a bona fide consumer good that may legally be sold in canada for use with cannabis. This has created an entirely new opportunity for retailers of all types to begin carrying these products in a legally compliant manner. This has resulting in an enormous influx of cannabis accessory products to enter the Canadian market, and has created an entire new ancillary industry of companies interested in getting involved in the space. The Cannabis Act, however, includes a number of very specific rules related to their promotion and sale, and failure to abide by these rules can result in significant penalties and potential criminal prosecution.

Cannabis accessories are not new. The current market, however, looks vastly different than it did just a few short months ago. With many new retail entities looking to start carrying these products there are a number of very important and specific rules that should be kept in mind by any business that is interested in entering this lucrative and growing product segment. With that in mind, five of the most important factors to keep in mind when purchasing cannabis accessories for your business are:

1.Not all materials are created equal

Modern cannabis accessories come in many different material types and qualities. These qualities affect the experience of the user, as well as the price. Accessory categories vary greatly and include products used for storage, consumption, cleaning, and ancillary products. Glass is generally considered to the best material to use for cannabis accessories in terms of quality, as well as highest in price. Other materials that are commonly used include wood, acrylic, and silicone. Each has their own unique pros and cons. Suppliers who carry exclusive products help differentiate retailers from their competitors. Having access to a distributor who is a leader in offering you the latest trends will help you service your customers with the most appealing products when they are most popular.

Many glass products such as bongs and pipes are sold without reference to the thickness of the glass used in their construction. It is important to note that many of these products are only approximately four mm thick and will break easily. Higher quality glass products will be at least five mm thick and will often be seven mm or even nine mm thick. Knowing the thickness of the glass used in cannabis accessories can be a good clue as to their overall quality.

3. Customer service

There are many cannabis accessory distributors that operate in Canada today, and choosing suppliers can always be tricky. When choosing a cannabis accessory supplier, there are a number of things that you should ask about, including turn-around time, which can vary greatly, warranty support, and reimbursement for broken and damaged items. Suppliers should also be capable of offering technical and service support seven days a week, and should be able to assist you in creating orders and payment processes.

4. Merchandising

As cannabis accessories are a new product category for many retailers, the ability of your accessory supplier to provide you with meaningful and impactful merchandising support can be the difference between success and failure. An accessory supplier should be able to explain to you how to best sell the products, including display methods, and ensuring that there are multiple price points in each category. Choosing the right products for the market you are in can make or break inventory turnaround and may be one of the most important factors. Sales staff who have appropriate experience and knowledge can help advise you and in turn can help increase the success of your store. Customers have preferences and it takes knowledge to understand these customers and provide them with the exact product they are looking for.

5. Liability insurance

Since cannabis accessories have only recently become legal, many of the formalities and best practices of the consumer goods industry have yet to be incorporated into many supplier’s businesses. Retailers of cannabis accessories should be vigilant in ensuring that their accessory suppliers maintain adequate insurance to cover any liability issues. Furthermore, retailers should ensure the products they are carrying are compliant with the Cannabis Act, which do not allow certain graphics, such as cartoons, to be used. Failure to adhere to these requirements can result in substantial penalties under the Cannabis Act and provincial regulations.

By examining these factors in relation to the accessories you are considering selling at your business you can avoid many of the costly mistakes that can be made with the sale of these items, and create a profitable new product category for your business.

Ariel Glinter is a former lawyer who now acts as director of business development and regulatory compliance for Maqabim Distributors Ltd., a Canadian industry leader in the design, manufacture and distribution of cannabis accessories, vaping products and accessories, and related items.